In Order to Provide the Most Useful Information for an Organization's

question 45

Multiple Choice

In order to provide the most useful information for an organization's risk management decisions, which of the following should be assessed?

• A) Risk levels for future events based on the degree of uncertainty of those events and their cost of mitigation.
• B) Inherent and control risks and their impact on the extent of financial misstatements.
• C) Risk levels of current and future events, their effect on the achievement of the organization's objectives, and their underlying causes.
• D) Risk levels of current and future events, their impact on the organization's mission, and the potential for the elimination of existing risk factors.

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Definitions:

Cost Model

An accounting approach that measures an asset based on its historical cost minus any accumulated depreciation and impairment losses.

Impairment

Reduction in the recoverable value of an asset below its carrying amount.

Recoverable Amount

The higher value between an asset's fair market value less costs to sell and its value in use.

AASB 136

The Australian Accounting Standards Board standard that deals with impairment of assets, requiring assets to be carried at no more than their recoverable amount.